RFM buys out Unilever’s pasta business

LIssted food and beverage company RFM Corp. has acquired the Unilever Group’s pasta business for more than P2 billion.

Besides pasta business, RFM is also in a joint venture with Unilever for Selecta ice cream.

Still subject to customary closing requirements, RFM has agreed to acquire the Royal brand and pasta business of the Unilever Group, a disclosure to the Philippine Stock Exchange showed on Thursday.

RFM said that the transaction was valued at $47.8 million or over P2.1 billion, covering mainly the Royal trademarks, goodwill and inventories.

“The acquisition of the Royal brand, which is the no. 2 pasta brand in the Philippines, would allow RFM to strengthen its market leadership in the pasta category,” said Jose Concepcion 3rd, RFM president and chief executive officer.

RFM currently also owns Fiesta, the no. 1 pasta brand in the market today.

Concepcion said that the company hopes to grow the pasta market by offering ready-to-cook and affordable pasta meals to consumers.

According to him, the Royal brand, which has a premium price point, would not only strengthen market leadership for the company in the segment but would also complement the value-positioning of its Fiesta brand.

“The Royal brand brings a solid and enduring heritage value with decades of experience and around 58 years in the Philippines, known and loved by generations of Filipino families,” Concepcion added.

Last year, RFM has raised as much as P1.6 billion through a top-up rights offering to prepare itself for expansion and possible acquisitions.

Concepcion said that proceeds from that offering helped fund the acquisition of Royal brand, in addition to internally generated cash flows.

“Moving forward, RFM will continue to look for acquisitions that will strengthen its position in the food and beverage categories. The acquisition is expected to boost topline revenues of RFM, and will more than offset the lost revenues out of its selling the Swift meat business in late 2012,” Concepcion said.